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What’s the Difference Between a Furnace and a Heat Pump?

What’s the difference between a furnace and a heat pump, and what does it mean for your home’s comfort? We discuss what distinguishes them and their respective advantages.

What’s the Difference Between a Furnace and a Heat Pump?

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Fire & Ice Team


September 29th, 2021

One of the most common questions that we hear from customers is, “What’s the best way to heat my home?” Depending on your specific heating needs, it typically comes down to either a heat pump, a furnace, or a combination of the two.

In this article, we’ll go over the differences between the types of central air heating systems, the benefits of each system, and which system is right for you. Before you invest in your next HVAC unit, you should be educated about your options so that you know what you’re buying and why.

Here at Fire & Ice, we’ve installed thousands of HVAC units, and have worked with many homeowners who want to know the basics of heating.

By the end of this article, you'll know the types of heating options that are available and have a better idea of which solution is right for you.

HVAC Contractor holding piece of paper

What’s the Difference Between a Furnace and a Heat Pump?

The main difference is that a heat pump can both heat and cool your home, while a furnace only heats.

However, heat pumps can struggle to provide enough warmth when outside temperatures get too low.

During cooler seasons such as fall and spring, the heat pump handles the heating duties solo. The dual-fuel system still incorporates the furnace, but it does it without using any burners that provide the gas furnace’s heat; it uses only the blower.

During milder months in spring and fall, the heat pump can supply warm air while the furnace remains ready to provide even warmer heat. Depending on the efficiency and fan of the heat pump, it starts to provide less and less heat as the temperature drops to 30 degrees Fahrenheit and lower.

As long as the temperature outside is above 30°F or so, a heat pump can pull heat from the outside air for less than it costs to fire up the furnace. Even when it’s cold outside, a decent amount of heat is available. The furnace kicks in for only the coldest months.

Electric furnaces, on the other hand, provide heat whatever the outside temperature. The tradeoff is that using the heat strips inside of the furnace that provides the furnace’s warmth will substantially increase your electric bill.


You may have heard the term “variable-speed” in reference to HVAC equipment. Sometimes this refers to air conditioners or heat pumps, but it also pertains to furnaces. More specifically, it concerns the blower motor in the furnace, which is what moves air throughout your system.

Basic furnaces have a single-stage blower, meaning it’s either on or off. There aren’t degrees of control between those two. Two-stage motors will usually have a 100% setting, then another that’s lower (about 60% to 70% power). This provides additional control and comfort.

Variable-speed units can have hundreds of individual speed settings. This offers a very granular level of control over your heating and cooling.

What’s the Difference Between a Gas Furnace and an Electric Furnace?

When it comes to residential HVAC, there are two types of furnaces commonly seen: electric and natural gas. Rarer are furnaces that use oil or propane. The main difference between the four furnace types is their fuel source.

Gas furnaces are the most common. They combust natural gas to provide heat to a home.

Electric furnaces are the main alternative to gas-based systems and heat the home by passing electricity through heating coils, a.k.a heat strips.

Basically, an electric furnace and gas furnace function the same, because they both heat your home. They both require a central duct system to distribute the warm air.

However, there are differences between them. Their efficiency for starters. An electric furnace is hyper-efficient, able to use 100% of the energy it consumes.

A gas furnace’s efficiency is measured by an AFUE rating and can convert 80-97% of its fuel towards heat. An 80% AFUE rating, for example, means that up to 80% of the fuel goes towards heating the home, and the other 20% is exhausted as waste.

A gas furnace is a combustion appliance. You have a gas line (with a gas valve), an igniter, and different systems for capturing, separating, and spreading heat through your home.

The heart of the unit is the heat exchanger. This core component allows the unit to extract heat for safe use in your home. Some high-efficiency gas furnaces even have two heat exchangers, which allows them to extract more heat with less byproduct.

The byproducts of combustion (including carbon monoxide) have to be carefully managed. In a traditional furnace, this will be vented out through a chimney flue. In a high-efficiency gas furnace, the exhaust will need to travel out of the house through a PVC pipe.

How Does an Electric Furnace Work?

Have you ever looked into the toaster when it’s toasting bread? Much like a toaster, an electric furnace works the same way to heat your home. An electric furnace consists of a cabinet with a blower motor and heating coils attached to it. The heating coils are also referred to as a heat package.

When the thermostat calls for heat, an electric current runs through the heating coils, making them extremely hot. The blower motor inside the furnace pushes air over the heating coils and through the ducts to increase the temperature inside your home.

How Does a Heat Pump Work?

What a heat pump is doing is transferring heat from one location to another. During the heating season, it extracts heat out of the outside air and transfers it to the inside of your home.

The unit has a reversing valve that allows it to work as an air conditioner during the summer. It extracts heat out of your house and transfers it outside.

What Are the Benefits of Each System?

When it comes to heating your home, your heating needs can largely be determined by what fuel source you have available to you. With the price of natural gas being low, this makes gas systems more economical.

If you live in an area with milder temperatures or don’t have access to natural gas, you may benefit more from an all-electric furnace and heat pump combination. Electric furnaces are 100% efficient, but the higher costs of electricity can make your energy bills higher in colder climates.

Oil furnaces are still seen in older homes and can work with some modern cooling systems. They provide plenty of warmth, but they tend to be less efficient and worse for the environment.

Read more -- Trane Gas Furnace Guide: 2021 Pricing & Product Reviews

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Which System Is Right for You?

When it comes to determining which furnace is right for you, it comes down to your individual needs. Standard HVAC systems include a natural gas furnace and an air conditioner. If you have natural gas in your home, or have access to natural gas, a standard system is probably going to be the most economical and practical. Heating a home with natural gas is one of the cheapest forms of heating here in Columbus, Ohio.

However, if you live in a milder climate or don’t have access to natural gas, an electric air handler combined with a heat pump would be an effective method to heat and cool your home. Keep in mind, though, that heating a home using electricity tends to be more expensive.

The best use of a dual-fuel system is if you have natural gas and solar panels. If you have solar panels, your electricity is very cheap. So why not use as much electricity as you possibly can (electric powering the heat pump) before you use something that you’re paying for (gas furnace)?

Another reason dual fuel is used is you don’t have natural gas but you have propane or oil. If you have propane, we would suggest doing dual fuel because you can have your heat pump do most of the heating so you’re not draining your propane tank all winter long.

Cost of Gas vs. Electric Heating

The cost differential between the two equipment types is usually going to be negligible compared to what you’ll save or lose in utilities. If price is your top concern, you can often find a price range that meets your budget, then make your decision based on what will reduce your monthly energy bills the most. If you’re paying a little bit more or less upfront, that difference will usually pale in comparison to year-to-year utilities.

If you want to dig a little bit deeper, the high-efficiency (90% or more efficient) gas furnaces are generally our most expensive furnaces, but they also represent the best cost savings and comfort for our customers.

If you compare the upfront prices of standard (80% efficient) furnaces to electric furnaces, the difference is usually relatively small.

Things like the number of stages, the size and power of a unit, and its efficiency level have a large impact on initial cost. If you want to dig more into cost factors for furnaces, I’ve included a link below that goes into all the details you’ll need:

Read More: How Much Does a New Furnace Replacement Cost?

Cost of a New Gas or Electric Furnace

A new furnace can cost between $3,000 - $7,600, depending on the size of your home, the efficiency of your new furnace, and the sophistication of the equipment. That includes labor and permit fees. The price range accounts for smaller homes all the way up to homes that are 5,000 square feet. It also includes single-stage, two-stage, and variable-speed furnaces, as well as each of those types in both standard and high-efficiency models. Your home's size and the choices you make about your comfort will affect the final pricing.

Cost of a New Heat Pump

The cost of a heat pump replacement can range between $4,900 - $12,500. This range accounts for the cost of the equipment, labor, and other fees. It also covers a variety of system sizes and levels of sophistication, including variable-capacity heat pump systems.

The factors that can affect the price of your heat pump replacement include:

  • Capacity/power of the system
  • Efficiency
  • The HVAC equipment that you’re not replacing
  • Modifications to your existing system
  • Line set protection
  • Installation costs
  • Tax credits and rebates

Read more: How Much Does a Heat Pump Cost to Replace?

What to Do Next

Now that you know the difference between heat pumps and the different types of furnaces, visit our products page to research further the types of equipment we offer.

If you’re ready to start researching financing options or to have your in-home estimate, check below to see if you’re in our service area.

If you’re in Columbus, Ohio, or the surrounding areas, we’d love to have a Fire & Ice sales professional walk you through your options and help you choose the best furnace for you.

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